One of the most common concerns for many businesses is the need to develop fresh ways to acquire new customers and to retain current customers. There are currently a number of rewards programs in place across many different merchants that attempt to build customer loyalty and attract new consumers. These types of programs tend to reward consumers for shopping frequently at the sponsoring merchant and are usually tied to the amount, not just the number, of purchases as well.
Another approach to attracting customers is the use of coupons. As is well known, coupons are distributed through many different channels and, when presented at the time of purchase, provide an instant discount off an item or items. Coupons can be related to a particular product or a particular merchant. Thus, coupons may be sponsored by a manufacturer or by a merchant. Coupons have a number of drawbacks from the perspective of the merchant. One drawback is that in the view of some consumers, the use of coupons carries some stigma for both the consumer and the merchant. Accordingly, consumers who are embarrassed to use coupons are not attracted to a merchant by coupons regardless of their savings. Additionally, tracking coupons to determine which distribution channels were effective and to identify useful consumer trends or information has proven difficult. Other drawbacks to coupons include that consumers often forget them when shopping and that coupons typically do not require a large purchase at the merchant; but, instead, can be used if the consumer is spending $100 or only $10. Also, consideration must be given to the costs of printing and distributing coupons. The coupon approach, therefore, for attracting and retaining customers clearly has a number of problems.
Thus, an unmet need exists for a customer acquisition and retention program that overcomes the problems of traditional coupons and rewards programs.